Foods Vs. S. Samuel & Ors  Insc 364 (4 July 2006)
Pasayat & Tarun Chatterjee Arijit Pasayat, J.
calls in question legality of the judgment rendered by learned Single Judge of
the Andhra Pradesh High Court which was affirmed by a Division Bench in Writ
Appeal by the impugned judgment.
facts in a nutshell are as follows :
is run by Andhra Pradesh Nutrition Council and is owned and controlled by the
Government of Andhra Pradesh. The Nutrition Council is registered under the
Andhra Pradesh (Telengana Area) Public Societies Registration Act, 1350 (Act 1
of 1350 Fasli). The principal object is to provide and supply nutritious foods
to school and pre-school children, pregnant women and lactating mothers and
such other categories of beneficiaries as the Government from time to time
decide within the general framework of the Government social welfare programmes.
It is claimed to be a non-profit motive establishment. It does not sell or
distribute its product either in public or to outsiders except those selected
by the Government of Andhra Pradesh under its programmes. In April, 1982 a
question arose regarding demand of payment of bonus under the Payment of Bonus
Act, 1965 (in short the 'Act') to the employees of the appellant, and it
approached the Commissioner of Labour, inter alia, stating that the
production of the factory was handed over to the State Government by the CARE Organisation
that the factory
is a non-commercial venture and
it falls outside the ambit of the Act. By order dated 21.1.1983 the
Commissioner of Labour, Andhra Pradesh held that the provisions of the Act have
no application to the factory of the appellant. In November 1984 appellants
sanctioned ex-gratia payment to the workers as per GOMs.319 for the year
1983-84 in view of the fact that the Act is not applicable to the appellant and
eligibility for the ex-gratia was on the lines being given in some other public
sector undertakings. In January, 1986, the Executive Committee of the Nutrition
Council decided to sanction ex-gratia of one month's salary each year in lieu
of bonus to the employees. On the basis of this decision, ex-gratia payment of
one month's salary from the year 1984-85 was given on the lines of certain other
public sector undertakings. GOMs. No. 366 dated 29.10.1993 was issued by the
Government of Andhra Pradesh, Finance and Planning Department, pending final
decision by the Government directing its various Organisations not to pay ex- gratia
until further orders. Appellant issued directions by its Circular dated
24.11.1993 that payment of ex-gratia to the employees shall stand withdrawn
until further orders.
of the appellant-establishment sent representations to the Minister of Labour
regarding stoppage of ex-gratia payment. Ministry of Labour by communication in
December, 1995 indicated that employees are not entitled to ex-gratia with
effect from November, 1993 onwards in view of the guidelines issued by the
Government. A Writ Petition was filed by 243 employees making grievance that
the stoppage of ex- gratia/bonus was unauthorized and contrary to law. Said
writ Petition was allowed by a learned Single Judge. It was submitted that the
question whether the employees were entitled to bonus is an industrial dispute
and the writ petition should not be entertained. Learned Single Judge turned
down the contentions of the present appellant that the Act does not apply to it
in view of Section 20 and Section 22 of the Act.
reference to certain documents he came to the conclusion that the stand of the
appellant that it was working without profit motive is factually wrong. In any
event, Section 22 of the Act would not stand in the way of entertaining the
writ petition. The appellant filed a writ appeal before the High Court which
maintained the order of learned Single Judge by the impugned judgment.
counsel for the appellant submitted that on a combined reading of Sections 20,
22 and 32(v)(c) of the Act, the inevitable conclusion is that the writ petition
should not have been entertained. Further Section 22 clearly stipulates that
the dispute raised is an industrial dispute under the Industrial Disputes Act,
1947 (in short the 'ID Act'). Since disputed questions of fact were involved,
the writ petition should not have been entertained.
response, learned counsel for the writ petitioners- respondents submitted that
in view of the established factual position, the High Court was justified in
entertaining the writ petition and deciding in favour of the writ petitioners.
20, 22 and 32(v)(c) read as follows :
20: Application of Act to establishments in Public Sector in certain cases :
If in any
accounting year an establishment in public sector sells any goods produced or
manufactured by it or renders any services, in competition with an
establishment in private sector and the income from such sale or services or
both is not less than twenty per cent of the gross income of the establishment
in public sector for that year, the, the provisions of this Act shall apply in
relation to such establishment in public sector as they apply in relation to a
like establishment in private sector.
otherwise provided in sub-section (1), nothing in this Act shall apply to the
employees employed by any establishment in public sector.
22 : Reference of disputes under the Act Where any dispute arises
between an employer and his employees with respect to the bonus payable under
this Act or with respect to the application of this Act to an establishment in
public sector, then, such dispute shall be deemed to be an industrial dispute
within the meaning of the Industrial Disputes Act, 1947, or of any
corresponding law relating to investigation and settlement of industrial
disputes in force in a State and the provisions of that Act or, as the case may
be, such law, shall, save as otherwise expressly provided, apply accordingly.
32: Act not to be applied to certain classes of employees:
(including hospitals, chambers of commerce and social welfare institutions)
established not for purposes of profit;" In a catena of decisions it has
been held that writ petition under Article 226 of the Constitution of India,
1950 (in short 'the Constitution') should not be entertained when the statutory
remedy is available under the Act, unless exceptional circumstances are made
U.P. State Bridge Corporation Ltd. and Ors. v. U.P. Rajya Setu Nigam S. Karamchari
Sangh (2004 (4) SCC 268), it was held that when the dispute relates to
enforcement of a right or obligation under the statute and specific remedy is,
therefore, provided under the statute, the High Court should not deviate from
the general view and interfere under Article 226 except when a very strong case
is made out for making a departure. The person who insists upon such remedy can
avail of the process as provided under the statute. To same effect are the
decisions in Premier Automobiles Ltd. v. Kamlekar Shantarum Wadke (1976 (1) SCC
496), Rajasthan SRTC v. Krishna Kant (1995 (5) SCC 75), Chandrakant Tukaram Nikam
v. Muncipal Corporation of Ahmedabad and Anr. (2002) (2) SCC 542) and Scooters India and Ors. v. Vijai V. Eldred (1998
(6) SCC 549).
Rajasthan SRTC case (Supra) it was observed as follows:
speedy, inexpensive and effective forum for resolution of disputes arising
between workmen and their employers. The idea has been to ensure that the
workmen do not get caught in the labyrinth of civil courts with their layers
upon layers of appeals and revisions and the elaborate procedural laws, which
the workmen can ill afford. The procedure followed by civil courts, it was
thought, would not facilitate a prompt and effective disposal of these
disputes. As against this, the courts and tribunals created by the Industrial
Disputes Act are not shackled by these procedural laws nor is their award
subject to any appeals or revisions. Because of their informality, the workmen
and their representatives can themselves prosecute or defend their cases. These
forums are empowered to grant such relief as they think just and appropriate.
They can even substitute the punishment in many cases.
can make and re-make the contracts, settlement, wage structures and what not.
awards are no doubt amenable to jurisdiction of the High Court under Article
226 as also to the jurisdiction of this Court under Article 32, but they are
extraordinary remedies subject to several self-imposed constraints. It is,
therefore, always in the interest of the workmen that disputes concerning them
are adjudicated in the forums created by the Act and not in a civil court.
is the entire policy underlying the vast array of enactments concerning
legislative policy and intendment should necessarily weigh with the courts in
interpreting these enactments and the disputes arising under them".
Kumar Sarkar and Ors. v. Eagle Rolling Mills Ltd. and Ors. (1964 (6) SCR 913)
the Constitution Bench of this Court observed as follows:
is true that the powers conferred on the High Courts under Art. 226 are very
wide, but it is not suggested by Mr. Chatterjee that even these powers can take
in within their sweep industrial disputes of the kind which this contention
seeks to raise. Therefore, without expressing any opinion on the merits of the
contention, we would confirm the finding of the High Court that the proper
remedy which is available to the appellants to ventilate their grievances in
respect of the said notices and circulars is to take recourse to s. 10 of the
Industrial Disputes Act, or seek relief, if possible, under sections 74 and 75
of the Act." The inevitable conclusion, therefore, is that both learned
Single Judge and the Division Bench have failed to consider the basic issues.
In the normal course we would have left it to the respondent to avail
appropriate remedy under the Act.
above aspects were highlighted in Hindustan Steel Works Construction Ltd. and
Anr. v. Hindustan Steel Works Construction Ltd. Employees Union (2005 (6) SCC 725).
reading of Section 22 of the Act makes the position clear that where the
dispute arises between an employer and employees with respect to the bonus
payable under the Act or with respect to the application of the Act in public
sector then such dispute shall be deemed to be an industrial dispute within the
meaning of ID Act.
disputed questions of fact were involved, and alternative remedy is available
under the ID Act, the High Court should not have entertained the writ petition,
and should have directed the writ-petitioners to avail the statutory remedy.
because of the long passage of time (the writ petition was filed in 1996), the
attendant circumstances of the case in the background noted above and in view
of the agreement that this is a matter which requires to be referred to the
Tribunal, we direct that the appropriate Government shall refer the following
question for adjudication by the appropriate Tribunal:
was violation of Section 9-A of the Industrial Disputes Act, 1947 as claimed by
withdrawal of the construction allowance amounted to the change in the
conditions of service? Question:
the A.P. Foods was liable to pay bonus under the Act to its employees? The
parties shall jointly move the appropriate Government with a copy of our
it is for the State Government to take a decision in the matter of reference
when a dispute is raised, the direction as noted above has been given in the
circumstances indicated above.
some cases, this Court after noticing that refusal by appropriate Government to
refer the matter for adjudication was prima facie not proper, directed
reference instead of directing reconsideration. (See Nirmal Singh v. State of
Punjab AIR 1984 SC 1619, Sankari Cement Alai Thozhilalar Munnetra Sangam v.
Management of India Cement Ltd. (1983) 1 Lab.L.J. 460, V. Veerarajan and others
v. Government of Tamil Nadu and Ors. (AIR 1987 SC 695), Sharad Kumar v. Govt.
of N.C.T. of Delhi (AIR 2002 SC 1724).
parties shall be permitted to place materials in support of their respective
stands. We make it clear that we have not expressed any opinion on the merits
of the case. The Tribunal shall make an effort to dispose of the reference
within four months of the receipt of the reference from the State Government,
which shall be done within three months from today.
appeal is allowed to the aforesaid extent with no order as to costs.